On 7 July 2015, the United States of America signed in Washington D.C an income tax treaty with Vietnam. The tax treaty, although not yet in force, marks a positive and substantive development in bilateral economic relations since the normalization of relations between the two countries 20 years ago.

The tax treaty must go through the ratification process by both Vietnam and the US before entry into force. Although the timing of when this tax treaty will be effective is uncertain at this stage, tax planning ahead should be considered. By this Alert, we would like to highlight notable pointson the Vietnamese tax perspectives as well as tax planning opportunities for US residents having income derived from Vietnam for your consideration.